The Issachar Fund (LIONX) is fully invested in Muni Bonds, Preferreds, Stocks, Small Cap Index Short and Gold. I added a few more long stock positions that were exhibiting signs of institutional accumulation after delivering a “surprise” earning report. I kept the index short and gold positions on as a hedge incase the market heads lower. Gold has not traded this high since 2014 and I would not have a problem adding to our gold position if I see signs of “big” demand. Our muni and preferred stock positions have been doing very well in this declining interest rate environment. At this time, I do not see rates rising anytime soon so I expect to hold the munis but everything else could be sold if the market breaks through support with a vengeance. (Portfolio holdings are subject to change at any time and should not be considered investment advice.)
The Fed cut rates ¼ point on Wednesday and the market seemed content as the indexes rallied to all-time highs! This was the first Fed rate cut since the 2008 financial collapse over 10 years ago. However, the euphoria of lower rates and a temporary halt in QT (Fed stopping its balance sheet reduction) ended promptly after President Trump tweeted that he will slap China with a 10% tariff on all imported goods on September 1st. The market turned tail and headed south on above average volume Thursday and Friday, but the indexes bounced off support at their 50-day moving averages (dma). I believe it is good sign to see the indexes finding favor near this widely watched area of support. This is typically where institutions come in and “support” their favorite stocks, at the 50-dma. If the indexes turn back down and “support” is not held then things could get ugly very quickly. I believe the market will not roll over into a bear market at this time because there is just too much liquidity still being “printed” around the globe. Let’s try to enjoy the ride while it lasts and try not to complain if the ride slows down a bit while the engines cool off to a more “normal” operating temperature.
Global central bank liquidity injections (QE) typically finds its way into the economy but it usually flows through the stock and bond market first! The European Central Bank announced last week that they are ready to lower rates again and European stocks sold off which may indicate that there are limitations to the effects of QE going forward. I will be monitoring this very closely for a sign of a potential protracted decline should the market lose confidence in the central banks’ ability to “rescue” the market. Could this be a “kink” in the armor? I suspect we will know shortly if we need to try on or “bear” suit or just get off the “bull”. On a positive note, Trump signed a trade agreement with Europe on Friday after 10 months of US beef export negotiations which should be good for America.
However, it will not be a pretty sight when the “market” has enough of this irresponsible deficit spending and refuses to accept dollars as a medium of exchange! We are not there yet, but I believe that is where we are headed. I believe that we are headed to a One World Currency as stated in the Bible and that currency might be a digital one. Ever hear of Bit Coin? That is just one of many digital currencies, but I believe Bit Coin has the most potential to be the world’s reserve currency. Again, we are not there yet, but it is just what I am seeing as a potential future event so let’s be prudent and never stick our heads in the sand or pretend that we have all the answers. I invest one day at-a-time managing the risk and taking what the market gives. It is not always easy, but by the Grace of God I absolutely love what I do. I always stand ready to do what is necessary to minimize losses and maximize gains in an effort to meet our objectives “seeking moderate capital appreciation consistent with capital preservation”.
Since we have been Justified through Faith, we have Peace with God through our Lord Jesus Christ. Romans 5:1
Bottom line: If the indexes hold the “line in the sand” support at their 50-dma, I believe that will be a good sign of institutional demand. However, if the “line in the sand” is crossed on above average volume then I will be forced to act accordingly. My focus remains on risk management in an effort to avoid life-changing losses for you and me. If you know of someone who might benefit from my style of risk management, please help me in any way you can. I really appreciate your Trust and Business! Grace and Peace to Everyone!
Investors should carefully consider the investment objectives, risks, charges and expenses of the Issachar Fund. This and other important information about the Fund are contained in the prospectus, which can be obtained by calling 1-866-787-8355 or visiting https://www.LIONX.net. The prospectus should be read carefully before investing. The Issachar Fund is distributed by Northern Lights Distributors, LLC., member FINRA/SIPC. Horizon Capital Management Inc, Inc is not affiliated with Northern Lights Distributors, LLC.
Important Risk Information
Mutual Funds involve risks including the possible loss of principal.
The Fund may hold cash positions when the Adviser feels that the market is not producing returns greater than the short-term cash investments in which the Fund may invest. Municipal securities backed by current or anticipated revenues from a specific project or specific assets can be negatively affected by the inability to collect revenue, for the project or from the assets. Moreover, an adverse interpretation of the tax status of municipal securities may make such securities decline in value. There is a risk that the sections of the market in which the Fund invests will begin to rise or fall rapidly and the Fund will not be able to sell stocks quickly enough to avoid losses or reinvest its cash positions into areas of the advancing market quickly enough to capture the initial returns of changing market conditions.
If the Fund’s uses hedging instruments at the wrong time or judges market conditions incorrectly, the hedge might be unsuccessful, reduce the Fund’s investment return, or create a loss. The use of leverage can magnify the effects of changes in value of the Fund and could cause investors in the Fund to lose more money in adverse environments. The Adviser’s judgment about the attractiveness, value and potential appreciation of particular asset classes and securities in which the Fund invests may prove to be incorrect and may not produce the desired results. Past performance is no guarantee of future results. If the Fund’s uses hedging instruments at the wrong time or judges market conditions incorrectly, the hedge might be unsuccessful, reduce the Fund’s investment return, or create a loss. The use of leverage can magnify the effects of changes in value of the Fund and could cause investors in the Fund to lose more money in adverse environments. NLD Review Code: 3578-NLD-8/5/2019